News

Diodes Inc. Reports Third Quarter 2009 Financial Results

November 05, 2009 by Jeff Shepard

Diodes Inc. reported financial results for the third quarter ended September 30, 2009. Revenue for the third quarter of 2009 was $122.1 million, an increase of 17.5% from the $103.9 million reported in the second quarter of 2009 and off only 9% from the record revenue of $134.0 million reported in the third quarter of 2008.

The sequential increase in third quarter revenue was driven primarily by demand for the company’s products utilized in end-equipment such as LCD and LED televisions and LCD panels, set-top boxes, mobile handsets and notebooks. Revenue exceeded the high end of company’s guidance of a sequential increase of 13 to 17% due to customers in Asia advancing fourth quarter orders into the third quarter in preparation for the one-week National Holiday customs shut-down in China, which began October 1st.

Gross profit for the third quarter of 2009 was $37.6 million, or 30.8% of revenue, compared to $27.4 million, or 26.3%, in the second quarter of 2009 and $38.1 million, or 28.4%, in the third quarter of 2008. The increase in gross margin was attributable to continued improvements in utilization at the company’s packaging facilities as well as increased capacity utilization at its wafer fabrication facilities.

Commenting on the quarter, Dr. Keh-Shew Lu, President and Chief Executive Officer of Diodes Inc., said, "The third quarter marked a significant milestone for Diodes as we returned to GAAP profitability, while also delivering robust revenue growth. This achievement is a direct result of our disciplined operational management and solid execution on our new product strategies during the economic downturn that properly positioned the Company to benefit from the recent economic improvements. From the first quarter low point in the business cycle, we have grown revenues by approximately 56% and are reaching historical highs in many product areas, in particular our analog business. Over the last several quarters, we have been focused on cash preservation, but we are now in a solid financial position to return to our profitable growth model, which has produced an enviable track record of profitability for the past 18 consecutive years."

Third quarter GAAP net income was $7.0 million, or $0.16 per diluted share. As a result of generating positive net income for the quarter, 44.0 million fully diluted shares were used to compute third quarter GAAP earnings per share, compared to 41.6 million basic shares used in the second quarter. The diluted shares in the third quarter included approximately 1 million shares issued due to recent repurchases of Convertible Senior Notes in exchange for Common Stock.

Non-GAAP adjusted net income was $9.0 million, or $0.21 per diluted share, which excluded, net of tax, $1.2 million of non-cash interest expense related to the amortization of debt discount on the Convertible Senior Notes in accordance with FASB ASC 470-20 (prior authoritative literature FSP APB 14-1), $0.9 million of non-cash acquisition related intangible asset amortization costs, and nominal amounts for restructuring charges and a loss on the extinguishment of debt.